Re: Membership sale agreement questions
From: Stephen Hawthorne (hawthornacpub.duke.edu)
Date: Fri, 15 Apr 94 12:31 CDT
We are setting up as a mixed income housing coop where the coop
corporation will own the land and buildings, much the way coop apartment
buildings have been done for years in NYC.

We are setting up that way so that members who are not making enough money
to qualify for a standard bank loan since they are artists, musicians,
single mothers, etc, can participate as owners nonetheless.

We're using a standard coop packet of agreements which I can forward you
if interested.

We are limiting equity to discourage speculation: we want low turnover and
longevity, so people should invest their money that they need a return on
elsewhere, not in the coop housing venture.  

New people buying in will have to be approved by the community as a whole.
The sales price will include the individual's equity plus an amount to
adjust for inflation.  We want to keep the price of housing affordable,
and cohousing units are already appreciating more rapidly on the open
market than comparables in the single family category of real estate sales.

We are woking out a downpayment arrangement that will likely have two
options: full downpayment if possible, which is likely to be around
$10,000, and will cover infrastructure costs but not land costs.  Second
option would be $5,000 and a rpomissory note for the balance held by the
corporation as the more well to do members are able to create a capital
pool for internal loans within the community.

Default terms: unclear as yet.  Since the corporation owns the land and
the buildings, people are granted the right to live in the house they
build, and are shareholders in the corporation.  They have what is
equvalent to a lease and thus can be "evicted" for any number of
infractions, including nonpayment of "rents", their portion of the
corporations mortgage that went into building their house.

Stephen Hawthorne 
for Blue Heron Partners, Inc. (incorporated yesterday,
closing today on the property).  Wish us luck

  On Fri, 15 Apr 1994, Rob Sandelin wrote:

> We are deveIoping a purchase sale agreement for our second phase and 
> would be interested in knowing how your group deals with the following:
> 
> Resale of contract.
>  Do you maintain the right to buy back the contract at cost? Or can 
> contracts be sold at any price to anyone?
> 
> Refund of investment.
>  Do you fully, partially or not refund contract monies. If so what 
> stipulations do you have on availability of funds?
> 
> Downpayment amount.
> How much downpayment is required.
> 
> Default terms.
> How do you define when a contract is in default and what is the 
> termination procedure used?
> 


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